SDLT No Longer Applies in Scotland; Now Land and Buildings Transaction Tax

SDLT, deposits and loan arrangements

This archived HMRC page appears to have dealt with whether deposits and loan arrangements count as chargeable consideration for SDLT, but the supplied text does not include the actual rule or HMRC’s detailed view. The only firm points are the page title and the note that, from April 2015, Scottish land transactions are generally subject to LBTT rather than SDLT.

• The topic is whether deposits, loans or related financial arrangements form part of the value used to calculate SDLT.
• The source provided is very limited and does not explain when a deposit or loan is included or excluded.
• Chargeable consideration can include more than the headline purchase price, so the legal nature of each payment or obligation matters.
• For Scottish land transactions from April 2015 onwards, SDLT generally does not apply and LBTT is the relevant tax instead.
• In practice, you should check the land’s location, the transaction date, and whether each payment, debt or loan is truly consideration for the land transaction.

Scroll down for the full analysis.

SDLT and deposit or loan arrangements: what this archived page tells you

This page concerns an archived HMRC manual entry titled “Chargeable Consideration: Deposit and loan arrangements”. The text supplied is extremely limited. It confirms only the topic heading and that, from April 2015, SDLT no longer applies to land transactions in Scotland, which are instead subject to Land and Buildings Transaction Tax.

What this rule is about

The heading suggests the underlying topic is whether deposits and loan arrangements form part of the chargeable consideration for Stamp Duty Land Tax. In SDLT, “chargeable consideration” is a central concept because it is the value on which tax is calculated. If a payment, assumption of debt, or other financial arrangement counts as consideration for the land transaction, it can affect the SDLT position.

However, the source text provided does not set out the actual rule, any examples, or HMRC’s reasoning. So the only safe conclusion from the material supplied is that this was an HMRC manual page dealing with that topic.

What the official source says

The official material provided says two things:

• the page title is “SDLTM18050 – Chargeable Consideration: Deposit and loan arrangements”;
• the page is archived, and from April 2015 SDLT no longer applies to land transactions in Scotland, which are instead subject to LBTT.

No further substantive guidance appears in the supplied text.

What this means in practice

In practice, the page title indicates that HMRC treated deposit arrangements and loan arrangements as issues relevant to working out chargeable consideration. That matters because parties to a property transaction sometimes structure payments in more than one way. For example, money may be paid upfront as a deposit, advanced under a loan, or left outstanding between connected parties. Whether those amounts count as consideration for the acquisition of land can change the SDLT analysis.

But based on the source supplied, it is not possible to state the detailed HMRC view on when a deposit or loan is included, excluded, or treated in a particular way. The source as provided does not contain that content.

The Scotland note matters because readers must be careful about the tax in point. For Scottish land transactions from April 2015 onwards, the relevant regime is generally LBTT rather than SDLT. So even if an archived SDLT manual page discusses a similar concept, it is not the governing tax for post-April 2015 Scottish transactions.

How to analyse it

Given the limited source material, the sensible framework is:

• Identify the land tax regime first: SDLT, LBTT, or LTT.
• Check the location of the land and the effective date of the transaction.
• Identify every amount or financial obligation linked to the transaction, including deposits, loans, debt assumptions, and deferred payments.
• Ask whether the amount is genuinely consideration for the land transaction, or whether it is a separate arrangement.
• Do not assume an archived HMRC manual page for SDLT applies to Scottish transactions after April 2015.
• If relying on HMRC manual material, locate the full page text and the underlying legislation before drawing conclusions.

Example

Illustration: a buyer pays an initial deposit on exchange and separately borrows money to fund completion. The tax question is not simply whether money moved, but what each amount represents in legal terms. A deposit may be part of the purchase price, while a loan used to fund the purchase may or may not itself be part of the chargeable consideration depending on the legal structure. The supplied source does not state the answer, but it shows that HMRC regarded this as a specific issue requiring separate analysis.

Why this can be difficult in practice

Deposit and loan arrangements are often easy to describe commercially but harder to classify legally. A payment can look like part of the price, security for performance, repayment of an existing debt, or funding provided by a third party. Tax treatment depends on the legal substance of the arrangement, not just the labels used by the parties.

This is especially difficult where:

• the contract and funding documents do not align neatly;
• there are connected parties;
• part of the price is left outstanding or converted into debt;
• the transaction involves Scotland and there is uncertainty over whether SDLT or LBTT applies.

Because the supplied material is only a heading and archive note, it leaves these practical issues unresolved.

Key takeaways

• The supplied source does not contain the substantive HMRC rule on deposits and loan arrangements.
• The topic concerns whether such arrangements form part of chargeable consideration for SDLT purposes.
• For Scottish land transactions from April 2015 onwards, SDLT is generally replaced by LBTT.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: SDLT No Longer Applies in Scotland; Now Land and Buildings Transaction Tax

View all HMRC SDLT Guidance Pages Here